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Housing market to soften slightly, CMHC says

Canada Mortgage and Housing Corp. says the market for existing homes will be softer this year than previously forecast, although the mid-point price will continue to rise from where it was in 2011.

National average existing home price predicted to be $365,100 this year

CMHC is forecasting sales of existing homes next year will total up to 489,700. (CBC)

Canada Mortgage and Housing Corp. says the market for existing homes will be softer this year than previously forecast, although the mid-point price will continue to rise from where it was in 2011.

The Crown corporation's latest quarterly outlook calls for up to 465,600 units of existing housing to be sold this year. That's about 20,000 units fewer than the comparable number in CMHC's previous outlook in August.

The mid-point price for sales of pre-existing housing is now anticipated to be $365,100 this year, about $3,000 lower than in the summer quarterly outlook.

The cost of housing is also expected to continue to rise next year, but by a smaller amount than previously forecast.

The revised 2013 mid-point price estimate is $370,500 — about $6,800 lower than the previous forecast but $5,400 higher than the revised estimate for 2012.

For next year, CMHC is forecasting up to 489,700 units of existing housing will be sold — about 2,100 more than the previous estimate.

CMHC raises starts projection

The federal Crown corporation, which provides mortgage insurance to home buyers and market intelligence to the real-estate industry, said the number of housing starts this year will be in a range of 210,800 to 216,600 units in 2012.

That compares with the previous range of 196,800 to 217,000 units in the August quarterly outlook. The mid-point estimate for housing starts issued Monday was 213,700 units — up from the August estimate of 207,200 units.

For next year, CMHC is forecasting 177,300 to 209,900 of housing units will be started — substantially less than this year.

"A weaker outlook for global economic conditions and the waning of the effect of pre-sales from late 2010 and early 2011, which contributed to support multi-family starts this year, will bring moderation in housing starts next year," said Mathieu Laberge, CMHC's deputy chief economist.

"Nevertheless, employment growth and net migration will help support housing starts activity going forward."

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